GOLD
Gold prices retreated after hitting an all-time high during early Wednesday trading. The surge in bullion value occurred amidst favourable conditions, catalysed by the US dollar's retreat from recent peaks and investors seeking refuge assets following an earthquake in Taiwan that tempered risk appetite. The dollar's depreciation coincided with investors pivoting their attention to Friday's US employment data, which is crucial in shaping the Federal Reserve's stance on interest rates. While the retreat of the dollar contributed to gold price gains, the primary impetus stemmed from a sudden downturn in global market risk appetite. The earthquake in Taiwan disrupted the island's infrastructure, particularly impacting chip production vital for artificial intelligence. Despite the potential for dollar strength, the precious metal maintains its footing, with sights set on the $2,300 mark amidst ongoing uncertainties.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European stocks opened slightly higher following yesterday's sell-off, while monetary scepticism seems to prevail.
The appetite for riskier assets has been severely tempered this week as investors continue to observe better-than-anticipated macro data in Europe and the US, which has significantly fueled the "higher for longer" case regarding borrowing rates.
As laid out in yesterday's report, the STOXX-50 index quickly fell back shortly after registering a new all-time high, a move that accelerated further following a strong CPI print in Germany and US JOLTs topping estimates in the afternoon.
"Good news is bad news" is clearly the new stance here. Investors remain cautious as economies continue to be resilient to the high rate environment, while central bankers still need further evidence that inflation is cooling down.
Regarding inflation, traders will cautiously monitor the latest CPI report from Europe this morning, where lower figures than anticipated could reverse market sentiment in the short term.
A batch of major US data loom, including the ADP Nonfarm Employment Change, the Services & Non-Manufacturing ISM PMIs, and the crude oil inventories, may boost market volatility in the afternoon, ahead of next Friday's US NFP report.
Technically speaking, the STOXX-50 index invalidated its short-term bullish trend yesterday, opening the way to a correction or market consolidation.
The next support levels can be found at around 5,026pts, 5000pts, and 4,970pts, while 5063 is seen as a major resistance on a very short-term basis.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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